Oil Continues To Trend Down Despite Declining Gasoline Inventories

Earlier this week, I showed that despite the market’s punishing of the price of crude oil and oil-related stocks, there appears to be no glut of oil in the United States.  At least, there is no glut that has not persisted for a year.  Well, now that the new weekly petroleum status report has been released, let’s see if this situation has changed.

At the end of the week ending October 24, 2014, the nation’s commercial crude inventories contained a total of 379.7 million barrels of oil.  While this is an increase from the previous week’s level of 377.7 million barrels, it is still noticeably below the level that these inventories contained last year.  At the end of the same week last year, the nation’s commercial crude inventories contained 383.9 million barrels of oil.

Meanwhile, the nation’s inventories of gasoline continued to decline over the past week.  This may be a sign that the lower prices at the pump today compared to earlier this year are prompting Americans to do more driving.  At the end of the week ending October 24, the nation’s inventories of motor gasoline contained a total of 203.1 million barrels.  This is lower than last week’s level of 204.4 million barrels.  It is also significantly lower than the level contained in these inventories at the end of the same week last year.  At the end of that week, the nation’s inventories contained a total of 213.8 million barrels of gasoline.

This year-over-year decline in gasoline inventories came even as refineries were receiving larger volumes of crude oil and enjoyed higher utilization than last year.  This may be further evidence that domestic gasoline demand is rising, particularly considering that refineries produced a greater volume of gasoline than in the previous week.

However, despite the fact that both oil and gasoline inventories are lower than in the same week of last year and gasoline inventories are also down week-over-week, the price of crude oil continued to trend down over the week ending October 24.  At the end of the week ended October 17, WTI had a spot price of $82.80.  This had fallen to $81.27 by the end of the week ended October 24.  The spot price of WTI at the end of the same week last year, a time when inventories of both crude oil and motor gasoline were higher, was $97.40.